Notice2025-10243
Federal Need Analysis Methodology for the 2026-27 Award Year-Federal Pell Grant, Federal Work-Study, Federal Supplemental Educational Opportunity Grant, William D. Ford Federal Direct Loan, and TEACH Grant Programs
Primary source
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Published
June 5, 2025
Issuing agencies
Education Department
Abstract
The Secretary announces the annual updates to the tables used in the statutory Federal Need Analysis Methodology (Need Analysis) that determines a student's Student Aid Index (SAI) for award year (AY) 2026-27 for student financial aid programs, Assistance Listing Numbers (ALN) 84.007, 84.033, 84.063, 84.268, and 84.379. The intent of this notice is to alert the financial aid community and the broader public to these required annual updates used in the determination of student aid eligibility.
Full Text
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<title>Federal Register, Volume 90 Issue 107 (Thursday, June 5, 2025)</title>
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[Federal Register Volume 90, Number 107 (Thursday, June 5, 2025)]
[Notices]
[Pages 23922-23925]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-10243]
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DEPARTMENT OF EDUCATION
Federal Need Analysis Methodology for the 2026-27 Award Year--
Federal Pell Grant, Federal Work-Study, Federal Supplemental
Educational Opportunity Grant, William D. Ford Federal Direct Loan, and
TEACH Grant Programs
AGENCY: Federal Student Aid, Department of Education.
ACTION: Notice.
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SUMMARY: The Secretary announces the annual updates to the tables used
in the statutory Federal Need Analysis Methodology (Need Analysis) that
determines a student's Student Aid Index (SAI) for award year (AY)
2026-27 for student financial aid programs, Assistance Listing Numbers
(ALN) 84.007, 84.033, 84.063, 84.268, and 84.379. The intent of this
notice is to alert the financial aid community and the broader public
to these required annual updates used in the determination of student
aid eligibility.
FOR FURTHER INFORMATION CONTACT: Heather Hall Lewis. Telephone: (202)
453-6519. Email: <a href="/cdn-cgi/l/email-protection#266e4347524e4354086e474a4a6a43514f5566434208414950"><span class="__cf_email__" data-cfemail="69210c081d010c1b4721080505250c1e001a290c0d470e061f">[email protected]</span></a>.
If you are deaf, hard of hearing, or have a speech disability and
wish to access telecommunications relay services, please dial 7-1-1.
SUPPLEMENTARY INFORMATION: Part F of title IV of the Higher Education
Act of 1965, as amended (HEA), specifies the criteria, data elements,
calculations, and tables that make up the Need Analysis.
Section 478 of the HEA requires the Secretary to annually update
the following five tables for inflation: the Income Protection
Allowance (IPA), the Adjusted Net Worth (NW) of a Business or Farm, the
Asset Protection Allowance, the Assessment Schedules and Rates, and the
Employment Expense Allowance. The updates are based, in general, upon
increases in items such as, but not limited to, the Consumer Price
Index (CPI).
[[Page 23923]]
The Secretary updates the above tables to account for inflation
that took place between April 2020 and April in the year prior to the
beginning of each award year. The increases in the tables must be based
on a percentage equal to the percentage increase in the Consumer Price
Index for All Urban Consumers (CPI-U) for April of the applicable year.
This notice includes the 2026-27 AY values for the tables in
sections 1 (Income Protection Allowance), 2 (Adjusted Net Worth of a
Business or Farm), 3 (Asset Protection Allowance), 4 (Assessment
Schedules and Rates), and 5 (Employment Expense Allowance).
1. Income Protection Allowance (IPA). This allowance is the amount
of living expenses associated with the maintenance of an individual or
family that offset the family's income. The allowance varies by family
size and marital status. The IPA for dependent students is $11,770. The
IPAs for parents of dependent students and independent students are
listed in the tables below.
Parents of Dependent Students
------------------------------------------------------------------------
Family size Income protection allowance
------------------------------------------------------------------------
2....................................... $29,190
3....................................... 36,330
4....................................... 44,880
5....................................... 52,950
6....................................... 61,930
------------------------------------------------------------------------
For each additional family member add $6,990.
------------------------------------------------------------------------
Married Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
Family size Income protection allowance
------------------------------------------------------------------------
3....................................... $57,730
4....................................... 71,280
5....................................... 84,120
6....................................... 98,370
------------------------------------------------------------------------
For each additional family member add $11,110.
------------------------------------------------------------------------
Single Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
Family size Income protection allowance
------------------------------------------------------------------------
2....................................... $54,950
3....................................... 68,430
4....................................... 84,480
5....................................... 99,700
6....................................... 116,590
------------------------------------------------------------------------
For each additional family member add $13,180.
------------------------------------------------------------------------
Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
Marital status Income protection allowance
------------------------------------------------------------------------
Single.................................. $18,310
Married................................. 29,350
------------------------------------------------------------------------
2. Adjusted Net Worth (NW) of a Business or Farm. A portion of the
full NW (assets less debts) of a business or farm is excluded from the
calculation of an SAI because (1) the income produced from these assets
is already assessed in another part of the formula, and (2) the formula
protects a portion of the value of the assets.
The portion of these assets included in the contribution
calculation is computed according to the following schedule. This
schedule is used for parents of dependent students, independent
students without dependents other than a spouse, and independent
students with dependents other than a spouse.
Adjusted Net Worth of a Business or Farm
------------------------------------------------------------------------
If the NW of a business or farm is .
. . Then the adjusted NW is . . .
------------------------------------------------------------------------
Less than $1......................... $0.
$1 to $175,000....................... $0 + 40% of NW.
$175,001 to $520,000................. $70,000 + 50% of NW over
$175,000.
$520,001 to $870,000................. $242,500 + 60% of NW over
$520,000.
$870,001 or more..................... $452,500 + 100% of NW over
$870,000.
------------------------------------------------------------------------
[[Page 23924]]
3. Asset Protection Allowance (APA). This allowance protects a
portion of NW (assets less debts) from being considered available for
postsecondary educational expenses. There is one asset protection
allowance table for parents of dependent students, independent students
with dependents other than a spouse, and independent students without
dependents other than a spouse.
Parents of Dependent Students, Independent Students With Dependents Other Than a Spouse, and Independent
Students Without Dependents Other Than a Spouse
----------------------------------------------------------------------------------------------------------------
And the older parent or the independent student is . . .
If the age of the older parent or the independent
student is . . . ---------------------------------------------------------
Married Single
----------------------------------------------------------------------------------------------------------------
Then the allowance is . . .
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25 or less............................................ 0 0
26.................................................... 0 0
27.................................................... 0 0
28.................................................... 0 0
29.................................................... 0 0
30.................................................... 0 0
31.................................................... 0 0
32.................................................... 0 0
33.................................................... 0 0
34.................................................... 0 0
35.................................................... 0 0
36.................................................... 0 0
37.................................................... 0 0
38.................................................... 0 0
39.................................................... 0 0
40.................................................... 0 0
41.................................................... 0 0
42.................................................... 0 0
43.................................................... 0 0
44.................................................... 0 0
45.................................................... 0 0
46.................................................... 0 0
47.................................................... 0 0
48.................................................... 0 0
49.................................................... 0 0
50.................................................... 0 0
51.................................................... 0 0
52.................................................... 0 0
53.................................................... 0 0
54.................................................... 0 0
55.................................................... 0 0
56.................................................... 0 0
57.................................................... 0 0
58.................................................... 0 0
59.................................................... 0 0
60.................................................... 0 0
61.................................................... 0 0
62.................................................... 0 0
63.................................................... 0 0
64.................................................... 0 0
65 or older........................................... 0 0
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4. Assessment Schedules and Rates. Two schedules that are subject
to updates--one for parents of dependent students and one for
independent students with dependents other than a spouse--are used to
further limit how much of the family financial resources are considered
to go toward educational expenses. For dependent students, the SAI is
derived from an assessment of the parents' adjusted available income
(AAI). For independent students with dependents other than a spouse,
the SAI is derived from an assessment of the family's AAI. The AAI
represents a measure of a family's financial strength, which considers
both income and assets.
The contribution of parents of dependent students, and independent
students with dependents other than a spouse, is computed according to
the following schedule:
Assessment of Available Income
------------------------------------------------------------------------
If AAI is . . . Then the contribution is . . .
------------------------------------------------------------------------
Less than -$8,500.................... -$1,870.
-$8,500 to $21,800................... 22% of AAI.
$21,801 to $27,300................... $4,796 + 25% of AAI over $21,800.
$27,301 to $32,800................... $6,171 + 29% of AAI over $27,300.
[[Page 23925]]
$32,801 to $38,400................... $7,766 + 34% of AAI over $32,800.
$38,401 to $43,900................... $9,670 + 40% of AAI over $38,400.
$43,901 or more...................... $11,870 + 47% of AAI over
$43,900.
------------------------------------------------------------------------
5. Employment Expense Allowance. This allowance for employment-
related expenses recognizes additional expenses incurred by working
individuals. For parents of dependent students, the employment expense
allowance is the lesser of $5,000 or 35% of the total earned income of
the student's parent and parent's spouse, if applicable. The employment
expense allowance for independent students with dependents other than a
spouse is also the lesser of $5,000 or 35% of the combined earned
income for the student and student spouse, if applicable. The allowance
is the same for independent students without dependents other than a
spouse if they are married, but if they are not married, the allowance
is zero.
Accessible Format: On request to the program contact person listed
under FOR FURTHER INFORMATION CONTACT, individuals with disabilities
can obtain this document in an accessible format. The Department will
provide the requestor with an accessible format that may include Rich
Text Format (RTF) or text format (txt), a thumb drive, an MP3 file,
braille, large print, audiotape, or compact disc, or other accessible
format.
Electronic Access to This Document: The official version of this
document is the document published in the Federal Register. You may
access the official edition of the Federal Register and the Code of
Federal Regulations at <a href="http://www.govinfo.gov">www.govinfo.gov</a>. At this site, you can view this
document, as well as all other documents of this Department published
in the Federal Register, in text or Portable Document Format (PDF). To
use PDF, you must have Adobe Acrobat Reader, which is available free at
this site.
You may also access documents of the Department published in the
Federal Register by using the article search feature at
<a href="http://www.federalregister.gov">www.federalregister.gov</a>. Specifically, through the advanced search
feature at this site, you can limit your search to documents published
by the Department.
Program Authority: 20 U.S.C. 1087 et seq.
James Bergeron,
Acting Chief Operating Officer, Federal Student Aid.
[FR Doc. 2025-10243 Filed 6-4-25; 8:45 am]
BILLING CODE 4000-01-P
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